OBSTRUCTION

Airtel-Telkom merger faces second opposition from laid-off staff

52 former employees of Airtel await a response from CA after they wrote to the regulator to hold the merger until their pending case being concluded

In Summary

•Former 52 employees of Airtel has written to Communication Authority of Kenya (CA) requesting the regulator to hold approval of the merger, in what would otherwise compromise the chances of their pending case being concluded.

•Kahara said they still await CA response once they review the raised concerns.

Airtel Kenya CEO Prasanta Das Sarma during the launch of Airtel Tubonge in Nairobi, March 28, 2017.
Airtel Kenya CEO Prasanta Das Sarma during the launch of Airtel Tubonge in Nairobi, March 28, 2017.
Image: FILE

The Airtel-Telkom Kenya merger has been thrown with another opposition from 52 former employees, which could delay deal closure and operations of the entity expected this month.

Former 52 employees of Airtel has written to Communication Authority of Kenya (CA) requesting the regulator to hold approval of the merger, in what would otherwise compromise the chances of their pending case being concluded.

“While Telkom will still retain part of its business, Airtel will fully merge as a new entity thereby jeopardizing chances of a fair hearing for our case,” a litigant and former HR manager David Kahara has said.

After the merger, Airtel and Telkom will be known as Airtel-Telkom under the joint venture.

In January 2016, Airtel laid off more than 62 other employees were laid off account of redundancy, claims that Kahara said they were without due process as required by the local labour laws.

“Airtel has deployed delaying tactics for the determination of our suit until recently when news of an intended JV with Telkom emerged,” Kahara added.

On 12th July 2019, the CA published a Kenyan Gazette as part of the merger requirements after approach by both telecommunication firms seeking approval for the merger.

In the Gazette notice, the CA invited individuals or entities opposed to the merger on any legality before expiry of 30 days period from its publication.

Kahara said they still await CA response once they review the raised concerns.

In March, the Committee on Implementation raised concerns of an emerging scandal where private individuals were buying off Telkom in a nontransparent way through the deal.

   

Telkom Kenya is majority-owned by private equity firm Helios Investment Partners (60 per cent) while the government holds the remaining 40 per cent stake.

The signal was after the companies had signed an agreement to merge their businesses and form an entity meant to offer new competition to telecommunication giant and dominant player, Safaricom Plc.

The parliamentary committee chaired by Narok North MP Moitalel ole Kenta invited among other agencies National Treasury, Ethics and Anti-Corruption Commission Headquarters, State Law office, Telkom Kenya, CA and the Ministry of ICT.

The committee forms part of the 2014 Special Report of Public Investment Committee (PIC) on the privatisation, recapitalisation and restructuring Telkom Kenya’s balance sheet adopted by parliament in 2015.

PIC blamed finance ministry for failing to protect the public interest and involve stakeholders during the restructuring.

The committee directed that the issues around the merger be addressed before a stamp of approval.

The merger negotiations once complete are expected to improve the financial position of Airtel.

In 2018, Airtel posted an Sh2.89 billion loss from accumulated losses and pilling debts.